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Updated: April 25, 2013 15:20 IST

Small onions in big demand

S. Ganesan
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In the news again: A combination of demand for exports, fall in production, and poor arrivals have triggered a rise in the prices of small onions. Photo: A Muralitharan
In the news again: A combination of demand for exports, fall in production, and poor arrivals have triggered a rise in the prices of small onions. Photo: A Muralitharan

Wholesale traders say government should curb exports until supply improves

With the price of small onions shooting up sharply, wholesale traders in the city have suggested that the government could restrict export of the bulbs until the price stabilises.

Poor arrivals because of drought-like conditions, heavy export demand, and hesitation among wholesale traders to lift stocks at high field prices have contributed to a sharp spurt in the price of small onions in the markets in the city over the past fortnight.

Small onions, known as “sambar onions” in local parlance, sold Rs. 47 a kg in the wholesale outlets at Gandhi Market, the city’s main market which caters to the retail markets in Tiruchi and its neighbouring districts such as Thanjavur, Pudukottai, Tiruvarur, and Nagapattinam. Just about a month ago, the wholesale price of the small onions ranged between Rs. 25 and Rs. 30 a kg here, according to traders.

Ironically, Perambalur and Tiruchi are major onion producing districts in the State. While Perambalur is the leading producer of onions in the State, with the bulbs being raised on an estimated 8,000 hectares of land and Tiruchi district accounts for about 4,000 hectares.

But many growers in Perambalur and Tiruchi districts have not gone for the crop because of lack of rain. Although some farmers had raised the crop in the districts, the 70 to 90-days crop is in early stages in some parts of Perambalur district, says R. Raja Chidambaram, State secretary, Tamizhaga Vivasayigal Sangam.

At present, poor arrivals have forced wholesale traders in the city to procure small onions from Udumalpet and Dharmapuri districts. The poor arrivals are attributed to the area under cultivation shrinking for want of rain, the rise in demand for exports, and the wholesale traders’ reluctance to buy the tubers at high prices.

“The field price of small onions has gone up to Rs. 45 a kg and after loading and transportation costs, we could sell it at only Rs. 47 or Rs. 48 a kg. At this rate, we have to take a big risk as we have to pay high interest on investment. Many traders are hesitant to procure at such costs as they will not be able to get back the investment immediately as most of them sell on credit to retail traders,” says A. Thangaraj, general secretary, Tiruchi Onion Commission Mandi Traders’ Association.

Onion arrivals have come down sharply at the wholesale market here. Normally, the market gets about 25 truck loads of small onions every day. Now, only five truck loads arrive daily, according to Mr. Thangaraj.

Mr. Thangaraj attributes the sharp spurt in the field price to the heavy demand for exports. “We are getting information that exporters in Chennai are procuring heavily, pushing up the price. Small onions are exported mostly to Malaysia, Singapore, and West Asia. The government should consider some temporary restriction on export until the price stabilises in the interest of consumers,” he says.

Wholesale traders say the price could come down provided arrivals from Theni district and Karnataka pick up in the coming days. Small onions from Perambalur and Tiruchi districts are not expected at least until a month and unless the exports are restricted the price would continue to rule high, wholesale traders say.

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